Lana Hempsall: Britain needs a welfare system which encourages work, not dependency | Conservative Home

Lana Hempsall is an entrepreneur and business coach, Conservative councillor, the CPF National Discussion Lead for Transport, and the co-founder and director of Conservatives in Energy. 

For months, Labour has talked about its plans to shake up the welfare system. On 18th March Liz Kendall, the Work and Pensions Secretary, unveiled the Government’s Green Paper, setting out the details of what is planned.

It is needed too, in part to reduce welfare spending by £5bn to prevent Rachel Reeves from having to hike taxes again in her Spring Statement. But also because welfare spending, particularly on incapacity and disability post COVID, has spiralled upwards leaving millions who could work excluded from the workplace.

The question is whether the Government’s plans are likely to deliver the reduced expenditure and encourage tens if not hundreds of thousands of people stuck on benefits into the workforce.

My interest in this subject is personal. I began to lose my eyesight in my mid-teens. I lived in Yugoslavia at that time and was told my only option was to weave baskets or operate a switchboard. When I moved back to the UK, I encountered that same prejudice.

I have also seen countless others who have some form of disability being actively discouraged from working – and a welfare system that often pays them more for doing nothing than a job on the living wage. But, in my case, I managed to succeed regardless of the system and, despite my needing a guide dog from my early 20s, have worked in business successfully for two decades.

Since the 1990s, discussions about welfare reform seem to work on the assumption that those receiving disability benefits are unwilling or unable to work at all. Labour appears to be challenging that presumption – but will the reforms announced this week deliver?

I believe passionately that many people on these benefits dream of contributing to society, of finding purpose through employment, yet are too often denied the opportunity. For the majority, our entire benefits system seems to steer them into long-term welfare dependency, reinforcing the message that work is out of reach.

The figures paint a stark picture. The UK currently spends a staggering £314bn annually on welfare, a figure predicted to rise to nearly £380bn by the end of the decade. That is unsustainable, particularly with the parlous state of the national finances.

At the heart of the current system are Personal Independence Payments (PIP), which are made to those with some kind of disability or incapacity. PIP claims have surged since the pandemic with total claims having almost doubled post 2019.

This increase has been seen predominantly in younger generations, where mental health conditions such as anxiety and depression now account for 70 per cent of PIP claims among those under 25. Meanwhile, six million Britons are on out-of-work benefits, with nearly one million assessed as being unfit for work.

In some constituencies, the numbers on benefits are truly shocking: in central Birkenhead for example, 51 per cent of the population are on work benefits. This is not just a fiscal problem – it is a huge wasted opportunity. The current system discourages employment and stifles ambition when it should be enabling people to take control of their futures.

The major flaw with our current system is that welfare policy has historically incentivised claimants to prove what they cannot do rather than what they can. This perverse incentive must end. The Green Paper acknowledges the need for change and goes some way in setting out proposed reforms that would have a positive impact; however, it is not yet clear that the reforms proposed will have the desired effect.

I support the Government’s stated intention to look at how we are assessing these benefit payments. Why, in particular, are we conflating the seriously disabled – who regrettably will never be able to work – with people who could participate and be an active member of the workforce under certain employment conditions?

Mental health encapsulates this, putting those with ADHD or depression into the same category (albeit often qualifying for lower levels of payments) as those suffering from the most serious mental health conditions. The latest statistics show one million more people are claiming a disabling mental health problem than two years ago, a pace of increase which is difficult to credit.

Not all disabilities truly leave a person completely helpless. Yet it seems that, by treating them equally, we are enforcing the idea that many people who might work may as well give up before even trying.

There is no doubt that many of these claimants are in genuine need of support and unable to work. But the steep rise in claims post-COVID is very concerning. This has been driven not only by the pandemic but also, as many reports have found, the fact that someone claiming these sickness benefits will receive higher payments than if they are paid the minimum wage.

Unless we reduce or eliminate that gap, certainly for those with less serious conditions or disabilities, there is surely very little incentive for them to be part of the workforce. Can we really expect people to purposefully take a pay cut in order to be part of the workforce?

I am far from convinced that the Government’s plans to tweak the system, reducing sickness payments at the margins, will have the impact it seeks. But it is worth looking at how this works in practice before reaching a final judgement.

Moreover, because there are so many millions on incapacity and disability benefits – a proportion of whom could be helped into work – what that means is reduced assistance for those with the most serious disabilities and illnesses. That is clearly the wrong approach; the state should be targeting maximum help for those most in need, not spreading its support across such a wide number of people.

There are also employers to consider. The Green Paper proposes measures such as encouraging a cultural shift, increasing flexible work policies and scaling up the Access to Work Scheme. This seems thin fare.

While these may be useful policies, they fail to grasp the bigger picture. The Access to Work Scheme, for example, currently covers just one per cent of working disabled individuals. Even if it was to double or quadruple its support, it will still have a minimal impact.

The question therefore remains: what role is there, if any, for government to incentivise businesses to employ those with disabilities, either up front or over a period of time, and how do we ensure that this is cost effective relative to the benefit payments it would replace?

For instance, if the state could offer a payment to businesses taking on a disabled person for a fixed period (say the first six months) surely if that payment were less than the benefit paid currently, that would make sense.

Reforming the system to provide meaningful employment pathways, rather than encouraging long-term dependency, is not just an economic necessity, it is a moral imperative. We cannot continue with a system that leaves millions without a job or even a prospect of one.

The Green Paper is certainly pushing the issue to the front of the political agenda; what we will now see is whether its ideas can make any practical difference – not just to the country’s finances, but also for the life chances of the disabled or sick who want a job.

At its core, the welfare system should not be treated as the only way for those with disabilities to survive, but as a launchpad. There is no question that disability benefits must remain available for those with genuine need, and without doubt a conversation needs to be had about our nation’s health.

But many disabled people want to work, as I did when starting out – and with the right support, they can.